A Complete Guide to Building a Successful Membership Model
When looking at nonprofit membership models, there are four main types that are easy to follow. Since each nonprofit organization is unique, choosing what model will work for you is a personal decision. It’s not only about creating and launching a new membership program but starting to manage internal change is just as important.
Even if your organization is completely volunteer-based, everyone needs to be excited and understand the changes and new rules you are implementing to avoid tension in the future. This article will describe in detail how to create a membership model that will lead your organization to success.
Here’s what we’ll cover:
- What is a Membership Model?
- Why Do You Need One?
- How to Make Membership Successful and Sustainable
- The 4 Major Types of Membership
- Determine Frequency and Fees
- Prepare Benefits and Commodities
- Prepare the Change Internally
- Tools to Get Started
Let’s do it!
What is a Membership Model?
Maybe you’ve never even heard about a membership model and have no idea what one is. That’s okay! This guide will help you understand the ins and outs of membership models and decide which one fits your organization best.
A membership model in its simplest form is a legal structure for how you will manage members. It defines how and when members will pay for access to your services or benefits. It isn’t only nonprofits that utilize a membership model. Often when we think of membership our mind may go to everyday businesses like Costco or even your local gym.
Other examples are companies like Netflix or Hulu, the prime examples of a subscription business, where individuals can become members by paying a monthly fee. Most companies that offer online courses usually are implementing a type of membership model as well.
Organizations can have either a formal or informal membership. Formal memberships are defined as large groups of people that deliberately join together for the purpose of accomplishing certain tasks. They are well-defined and professional. The IRS defines a formal association as:
"a group that has a written document, such as articles of association, showing its creation. At least two persons must sign the document, which must be dated."
Informal groups are usually smaller, and everyone is there as a volunteer. Meaning, they didn’t pay to be there. The structure is typically not well-defined and the relationship of those in the group is personal.
Usually, people join an informal group for their own sake. One example would be a monthly book club with a few friends.
Jules is loving his membership model!
Why Do You Need One?
Now that we’ve discussed the general definition and idea of what a membership model is, let’s talk about why you need one. No matter how small your organization is, you can benefit from a model. The more structured your organization is from the beginning, the easier the growth process will be since you’ll be able to scale additional members and responsibilities.
There are several reasons why a membership model is important and needed for a nonprofit. One of the most important reasons, though, is that it generates revenue. For a nonprofit, this may not seem like it should be your number one focus. However, you cannot continue to help others without generating revenue to stay afloat.
Having a steady form of income comes from membership payments, merchandise, sponsorships, and event tickets. This income can be used to increase the number of members you have as well as increase the impact your nonprofit has.
Membership models also help your organization get feedback that transforms into growth and retention. When your members stop attending events, visiting your website, or reading your emails it’s time to make a change. Membership models promote honest feedback on how your members are feeling so that you’re ahead of any issues and aren’t blindsided by the lack of participation.
Lastly, using a membership model sets your organization up for great growth opportunities. It will lower your cost of doing business so that you can add additional resources to gain new members. According to Marketing General, 78% of associations that have seen a renewal rate increase in the past year also have a tactical plan to increase engagement. That means that having a model leads to actual results!
How to Make Membership Successful and Sustainable
Now that you’re convinced creating a membership model will benefit your organization, let’s talk about how to go about it.
Understand the Specific Needs of Your Organization
In order to make a successful membership model, you need to define who you want to serve and how you want to serve them.
Without a detailed idea about exactly what you want to do, you are going to feel like you can’t get a grasp on your goals. For some organizations, this will be easy. As always, nonprofits are each unique and some aren’t as black and white in their goals as others. While it may take you some time to really nail this down, it is crucial to the success and sustainability of your membership model.
Conduct a Needs Assessment and Evaluate Risk
There are three factors that go into a needs assessment. They are market desire, feasibility, and risk. By looking at these on a deeper level, you can see a better picture of how a membership model will work for you and your organization.
Market desire looks at what your members actually want out of their membership. Are they here for discounts? For events? For news relating to the cause, you’re working on? Knowing this gives you a clear idea of what your members like and why they’re here.
Corinne is shouting
"Tell me your desires, please!"
Feasibility is all about whether or not it’s even possible to give your members what they want with your resources and goals. It might not be possible for you to host a free event given your current budget, and if that’s what your members are wanting, you will need to pivot.
For example: Maybe offer discounted memberships based on the number of referral sign-ups per member. That would bring on additional revenue and open your budget to give your members what they want. It’s critical to also include your goals in the feasibility as well. Just because your members are begging for something does not mean it’s the right thing to do for your organization.
You should always be keeping your short- and long-term goals in mind when looking at the feasibility of members’ wants.
The risk looks at what the most reasonable level of risk is when imaging internal and external forces. In business, there is always a certain level of risk, and nonprofits are no different. What happens if half of your members leave? Or what happens if you lose your principal source of funding?
These examples might seem extreme, but you need to be prepared for anything. Assessing risk allows you to create a plan and have a contingency set in place for when things go wrong.
By understanding your goals, creating a needs assessment, and evaluating risk you are setting up your membership plan for success and long-term sustainability.
The 4 Major Types of Membership
When looking at types of membership, there are generally four choices to pick from. It’s been said before, but your nonprofit is unique, so do not feel confined to these four. You may be able to create a type of membership that works specifically for your organization. Don’t forget, simplicity reigns supreme!
A trade association is a group of businesses or individuals who all want to achieve a goal or receive a specific benefit. Usually, these individuals and businesses are involved in a similar industry, thus creating common ground.
Members join trade associations to get the most out of what these organizations are offering. In order to have a successful trade association, you need to create and maintain benefits that members are wanting to see.
There are several benefits to joining a trade association, and your trade association should make sure that these are included in the membership. Possibly the most important is networking. Since more often than not trade associations are industry-specific, many members join to find like-minded folks and make connections with industry experts.
Members of trade associations also look for educational opportunities, certifications, training, influence, and industry best practices. They are looking to gain additional knowledge about their industry and how to further their career. One constant across industries is that there is a lot of competition. By being a part of a trade association, members get a leg up on their competition and become part of their industry’s community.
In this model, members join an organization for a fee and that fee supports a cause. For example, if you join a group that supports a local animal shelter for $100, they may say that 75% goes to the shelter. In this situation, normally the rest of the donation goes to operational costs like HR, tools, IT, etc.
Members-as-donors is considered the most traditional of the models because it’s typically what we think of when we think of nonprofits. This model is a great one for charity nonprofits who wish to donate part of the membership fees. It’s also easy to scale as your nonprofit grows.
There is one downside to this model and that is that members may just submit their one-time payment and then disappear. While it’s ideal to find members who also want to regularly participate, if you choose to go the members-as-donors route, you may find that there are a number of your members who don’t necessarily wish to participate in the day-to-day. If you see this happening, invest time in the membership experience, it will help you get your members more involved and engaged.
Freddy is ecstatic about member donations!
In a members-as-consumers model, the main focus pulls from a membership fee into participation. This model usually has a lower membership fee that is used for the good of the entire organization and all members rather than being used for one specific cause. By doing this, you’re opening the organization up to more members who will hopefully answer the call.
This model is often used by charter schools that keep membership dues low or nonexistent but rely on members to help in other ways. The same goes for other volunteer organizations. It’s extremely effective and beneficial as members see the difference that they are making in their community. The key is to make sure your members are actively donating so that your organization can keep existing.
If you are looking for rapid growth and to build a strong sense of community, this model could be a good option for you!
The members-as-advocates model is probably the most difficult organizational membership model to understand. It’s not as easy to define and can be a little confusing. Essentially, you are relying on the donation of intangible benefits from your members.
Advocacy organizations are focused on furthering the cause of the group, so they are looking for members to bring their skills, actions, experiences, and voices to the table. Then your organization provides guidelines and ideas to put the member’s skills to action.
An example of this type could be a local nonprofit that focuses on environmental impact. They could be recruitment for beach cleanups, raising awareness at local events, or hosting lecture nights. The nonprofit would rely on its members to be the ones organizing and leading all their events.
In this model, you will also probably include a touch of the members-as-consumers idea if you plan to have any funds. If not, and you are relying solely on volunteer time, this could be a great option as a model for you. For example, if the goal is just to volunteer at an animal shelter, whether that be with time or talents, and not donate money then members-as-advocates would work.
Determine Frequency and Fees
Once you know what model you want to use, you need to decide on how often you are going to charge and what that number will be. Often annual is the easiest way to go, but some of your members might not like the idea of making one large payment and want more flexibility.
An easy solution to different members wanting different billing options is to create them! By offering various dues structures you can accommodate more new clients. You can offer a couple of payment options such as a one-time, twice annually, or monthly payment. You can also choose to offer different tiers. Each tier can be a combination of increased dollar amount and benefits. Most memberships that are successful are the result of understanding and catering to the payment preferences of potential members.
Trish is pondering her
membership model fees
Prepare Benefits and Commodities
Next, start thinking about what sets your organization apart. What are the benefits of joining? You want to be special, but you also want your benefits to align with your nonprofit’s goals and provide deep value of membership.
For example, you don’t want one of your pillars to be that you’re a green company and then give out a goodie that isn’t recyclable.
Your organization’s benefits can include products, events, educational programs, or anything else that you think your members will enjoy. Just remember to keep them feasible as we discussed before.
Prepare the Change Internally
Now it’s time to implement your organizational membership model! Woo! Seemed like we’d never get here, huh? In order to do this, you need to take a few simple steps to prepare your departments for success.
Step 1: Clean your Data
The first step should be to clean and organize your data before implementing your membership model. Not prioritizing this step will slow you down in the long run and could even cause major issues down the line so, open that Excel spreadsheet and get cleaning!
Try and merge all of your different contact sheets together and update any old emails or phone numbers.
Pro Tip: If you have years of historical data to manage and a bit of cash to spare, try hiring a consultant to clean, organize, and prepare your data for this change. Clean data is not only useful for implementing new programs but essential to the efficiency and optimization of everyday tasks that may be painful for your staff.
Step 2: Pitch the Board
Next, it’s time to pitch the model to the board. If it’s just you, this part is easier. You want to make sure that your board is on board (pun intended) with the membership model you’ve chosen.
Make sure to present the data in a well-thought-out manner that is detailed and clear. Remember to have your presentation be short and sweet. You want to clearly present financial projections and outcomes so that the board can fully understand the pros and cons of the membership model you’ve selected.
Step 3: Inform the Staff
Once the plan has been adopted by the board, it’s time to take it to the staff. You can use different management techniques to help everyone adjust. Some that you can use are to create an internal membership playbook, have an all-hands meeting, and open a platform for your staff to give feedback.
An all-hands meeting is where all of your employees and leaders are invited to gather and learn about the proposed membership model. Once you have presented the model to your entire staff you can open up the floor for staff members to ask questions, express excitement, or potentially some concerns.
Chances are that some of your staff will be looking forward and excited for the new implementation, but there may be a few who aren’t on board. It would be wise to talk one on one with any staff members who aren’t excited about the model. Listen to their concerns, answer any questions that they have, and maybe you can sway their opinion. If anything - it shows them that their voice does matter, and while you may not agree you do value their opinion. These techniques will help the transition ease along smoothly.
As with any changes, there will likely be hiccups and a few frustrations. Remember that this is totally normal and be prepared to pivot as new challenges come to light. But with the guidance provided in this article, you can do this!
Tools to Get Started
The good news is that in this age of technology there are a lot of tools to help keep you organized and in communication with your members. Some communication tools that work both externally and internally are:
You can use these tools to reach the members that you want to keep in touch with.
There are also design tools that can help you create amazing content that’s both professional-looking and clean. Two resources that are easy to navigate and will make your life easier are:
The last thing to consider is an all-in-one membership management software such as Springly. Springly will help keep you organized and provide the data and metrics that you need to make the best decisions possible for your organization. From Springly you can track website visits, current donations, surveys, content, and other useful information. This is one of the best tools that nonprofits can adopt.
Marine is flexing her awesome Canva skills!
We did it! While it might seem stressful or even tedious, building the perfect membership model for your organization can help take your nonprofit to the next level. It’s the best roadmap to success because it allows you to create a plan and execute it.
By following some simple membership rules and principles, you’ll be on your way to an organized membership model that’s feasible and scalable.
While managing not only the creation of a new program, you must manage the internal change as well that will help make sure everyone is on board and ready to commit to helping your community on a new level.
Remember, your organization does not have to fit one of the exact four molds, but they do provide an excellent roadmap to success.
📣 What are the 4 main types of membership model?
The 4 most common types of membership model are: Trade associations, members-as-donors, members-as-consumers, and members-as-advocates. The model you choose depends on the structure, purpose, and target audience of your organization. Find out more.
🔑 Why do subscription models work?
Subscription models play on the growth and retention of your community by offering benefits that are good enough to attract new members while keeping your existing ones. The key to a successful membership model is understanding how you can match your organization's capabilities with the needs and desires of your members. Find out more.
📝 How do you develop a membership strategy?
First, determine your membership fees and how often you want your members to pay. Next, start thinking about the sorts of benefits that align with your organization's values as well your members' needs, and implement them. All that is left to do is prepare your internal teams for the change ahead and get equipped with the right digital tools. Find out more.